Bluebird by American Express: A Full Featured Checking Account That Never Overdrafts

American Express is offering a new checking account and debit card alternative with Walmart called Bluebird. A key benefit of it is that it will never overdraft.

Add Cash at Walmart

Adding cash to the Bluebird account at Walmart is free. This can be a good way to deposit cash. Walmart is open in evenings and on weekends. You don’t have to go by the bank hours. It’s a good feature for someone who’s paid cash for what they do.

Free ATM Withdrawals

Bluebird gives free ATM withdrawals from ATMs in the MoneyPass network if the user has direct deposit, which can be done by a scheduled recurring monthly transfer from a bank account. This can be useful when you are traveling outside your own bank’s territory but you can find a Walmart or MoneyPass ATM nearby.

Mobile Phone Check Deposit

With Bluebird you can deposit a check by taking a picture of it with a smartphone. If your own bank doesn’t offer mobile check deposit, you can deposit the check to Bluebird before withdrawing to your bank account.

Bill Payment

Transfer To and From a Bank Account

The link between the Bluebird account and a regular checking account is both ways and free. If you are using Bluebird for budgeting, this allows you to add money from your bank to Bluebird or transfer from Bluebird to your bank account easily.

Sub-Accounts and Transfers

You can have sub-accounts and transfer between them and the main account. You can also transfer money from one Bluebird account to another person’s Bluebird account. Good features for managing accounts set up for kids and other family members.

Replace Checking Account?

The Bluebird account is marketed as replacement for checking accounts. It has pretty much all the features you want for managing your money. What doesn’t the Bluebird card do that a regular checking account does?

(1) ACH debit. Some utilities and especially mortgage companies don’t accept cards but they will do auto-debit. Bluebird does not allow ACH debits. The alternative is to use bill payment from the Bluebird account.

(2) Use at places that don’t take American Express. Use a different card or cash at those places.

The Bluebird account already blocks overdrafts on the card side. When you write a pre-approved check, money is already set aside. ACH debit is the remaining source of overdraft. Not allowing ACH debit blocks that as well. As long as one can use bill payment, not having ACH debit may be actually desirable because you will never overdraft.

The feature-rich Bluebird account is indeed a good alternative to a checking account. For most things people do with a checking account, Bluebird can do the same, in many ways even better. Not possible to overdraft and no fees make it the best product for those who suffer from overdraft fees.

I read a report saying bank customers created average 7.4 overdrafts per account in 2011. When you take out a large percentage of customers who had zero overdraft, the average on the remaining accounts that had at least one overdraft must be much higher. In a perverse setup, those who don’t have money are footing the bill for free banking services for those who have money. For customers being dinged for overdrafts left and right, switching to Bluebird would be a no-brainer.

If Bluebird and whatever come out to compete with it are really successful in getting a large number of customers who currently supply overdraft revenue to the banks, banks will really have to charge the true cost of banking to customers who aren’t paying today. I’d rather pay the true cost than riding on the backs of those who have less.

For those with a good checking account already, the Bluebird account can be a substitute or backup ATM card, a convenient cash and check deposit conduit, a deposit-only bank account you can confidently give to others paying you, or an allowance tool for kids or elderly parents. There must be some other good ways to use it I haven’t thought of.

If you want a Bluebird account, just sign up online. They will send you a card in the mail. You add money to it after receiving the card. If you buy the “starter” card at Walmart, it will cost you $5 (not credited in the account).

[Photo credit: Flickr user PetraZone]

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Reader Interactions

Comments

That card sounds like a good deal for those who don’t have a checking account or have a problem with overdrafts. It is funny that some people think “rewards cards” are bad because they take advantage of those who overspend on their credit cards but they don’t have a problem with free checking accounts that are free mainly because of the money the bank makes from overdraft charges.

I think that you would be charged a fee for adding to your account from another checking/bank account. The direct deposit fee avoidance works only for employers. Which I could look to myself to be, I suppose, but not for many.

Wondering if this would be a good account to link to Paypal for payment purposes, to better protect more fully funded bank accounts from being connected to online shopping?

anie – Bluebird fee schedule specifically says “Add Funds: From a Checking/Savings Account $0.” Having direct deposit waives the ATM fee at MoneyPass ATMs. If you don’t use ATMs, it doesn’t affect you anyway. I suspect ACH debits are blocked on this. So you can’t use it as a bank account in PayPal for online shopping.

I would like to see a no fee bank where I can deposit my payroll checks without being charged a 5$ fee such as Bank of America! I have bluebird account but Walmart with not cash a payroll check. They only take cash for deposit to bluebird accounts. My employer wrote a paycheck to me his employee on Bank of America account but when I tried to cash it they still wanted to charge me a 5$ fee because I do not have an account with them (it costs to much they nickel and dime you everytime you turn around or claim that you do not have a min deposit such as 1500$ in your account.Who can afford their ridiculous fees? Can blue bird set up some kind of agreement with local banks so that I do not get screwed out of my 5$ everytime I try to deposit a check the bankers are truly modern day highway robbers or theives!

If your employer offers direct deposit you can sign up with the routing number and account number from Bluebird. If not you can get the free Bluebird mobile app and deposit by taking a picture of the check.

This is not like a checking account. Not pleased with them. Tried to make a deposit online and it did not go through and it took over 10 days to get notified. Bluebird misrepresented themselves. Why would you need this if you already have a checking account, you have to go to Walmart to deposit money to the card to spend, you could have just spent the money you were going to deposit.

I agree, it’s not quite as good as it once was. No longer can you link a debit card to it, and if you want new blank checks, you now must pay for them. However, you can still use it for direct deposit of your payroll check, free bill bay, and one other advantage is you do get the protections of AMEX when you make a purchase.

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Please note that The Finance Buff has financial relationships with some of the merchants mentioned here. The Finance Buff may be compensated if consumers choose to utilize the links located throughout the content on this site and generate sales for the said merchant.